Energy Transfer LP will pay $2.625 billion for Vaquero Midstream LLC, picking up a gathering and processing system in the Delaware Basin that the company expects to start adding to earnings right away.
The two companies signed a definitive agreement for the bolt-on deal. Energy Transfer will pay $1.95 billion in cash and issue about 33.3 million newly issued Energy Transfer common units for the rest. The companies expect the deal to close in the fourth quarter of 2026, subject to regulatory approval and other customary closing conditions.
What Energy Transfer is buying
Vaquero runs roughly 300 miles of wellhead gathering and intrabasin transportation pipelines across Loving, Reeves, Ward and Winkler counties in the Delaware Basin. At the center of the system is the Caymus Processing Complex, three processing trains with combined capacity of about 675 million cubic feet a day (MMcf/d). Vaquero owns enough acreage to build two more trains, which could push total processing capacity up to about 1.2 billion cubic feet a day (Bcf/d).
The system runs on long-term, fee-based firm contracts and acreage dedications. Energy Transfer said those contracts carry an average remaining life of about 10 years, backed by roughly 100,000 dedicated acres.
| Deal term | Detail |
|---|---|
| Total value | $2.625 billion |
| Cash portion | $1.95 billion |
| Equity portion | ~33.3 million new Energy Transfer common units |
| Expected close | Fourth quarter 2026 |
| Pipeline network | ~300 miles |
| Current processing capacity | ~675 MMcf/d |
| Potential processing capacity | ~1.2 Bcf/d |
| Dedicated acreage | ~100,000 acres |
| Average contract life | ~10 years |
Why Energy Transfer wants it
The Vaquero system already connects to Energy Transfer's downstream natural gas and NGL infrastructure. Energy Transfer said that connectivity should generate added revenue through pipeline transportation, fractionation, terminalling and export services, on top of giving it more access to growing gas and NGL production out of the Permian.
Energy Transfer said it expects the Vaquero assets to be immediately accretive to distributable cash flow per common unit.
We reported last month that ONEOK bought Brazos Midstream's Permian Midland assets for $4.425bn.
